Under US GAAP, accountants have significant leeway in deciding what accounting methods are applied when recognizing transactions and preparing the financial statements and disclosures. The consistency principle helps accountants deal with this ambiguity in GAAP by suggesting two things:

(1) Once an accounting method is chosen by a firm, the same method should be used consistently each period. A firm can change its accounting policies if new GAAP or new information suggests another method may be better. However, the change must be fully explained, and its effects must be fully documented in the notes to the financial statements.

(2) Accountants should strive to choose similar accounting policies as other firm’s in the same industry.

These two guidelines are important because consistency in financial reporting allows financial statements to be more comparable. Comparability is one of the fourenhancing qualitative characteristics of accounting information as per the conceptual framework of accounting:

Users’ decisions involve choosing between alternatives, for example, selling or holding an investment, or investing in one reporting entity or
another. Consequently, information about a reporting entity is more useful if it can be compared with similar information about other entities
andnwith similar information about the same entity for another period or another date.1

Consistency, although related to comparability, is not the same. Consistency refers to the use of the same methods for the same items,
either from period to period within a reporting entity or in a single period across entities. Comparability is the goal; consistency helps to
achieve that goal.2

Consistency is one of the driving forces behind the development of GAAP (and the convergence between US GAAP and IFRS). GAAP attempts to standardize and regulate accounting definitions, assumptions, and methods – this standardization inherently makes financial reporting more consistent. It allows us to be reasonable confident in our conclusions when comparing one business to another, one business to the performance of an industry as a whole, or the performance of a business in one period to its performance in other periods.

However, because of the difficulties of making one uniform set of rules for all business’s and all industries, variation still exists. The principle however, remains the same, and accountants strive to imbue accounting information they prepare with consistency.

Behavior of people cannot be predicted with 100 % precision.
What causes people to behave differently in similar situations?
To what degree can we predict their behavior? Give an example of a situation in which the prediction is simple and one in which it is difficult or impossible.
Can Organizational Behavior help us to in